Alphabet parent company Google reported fourth-quarter earnings that narrowly missed expectations despite a slowdown in cloud computing revenue growth. The stock fell, however, as the company forecast significantly higher capital spending in 2025. Meanwhile, Facebook parent Meta Platforms has stated plans to increase its capital spending, topping Wall Street estimates.
Google’s Q4 earnings rose 31% to $2.15 per share, driven by a 12% increase in gross revenue to $96.46 billion. Internet search-advertising revenue grew 12%, exceeding estimates of $53.3 billion. However, cloud computing revenue came in below expectations at $11.95 billion.
Analysts attribute the slower growth to increased competition from Chinese startup DeepSeek and AI-driven competition. Meta’s capital spending is expected to range from $60 billion to $65 billion, topping Wall Street estimates of $51.4 billion. Analysts expect Meta’s artificial intelligence business to boost advertising revenue in 2025.
CEO Sundar Pichai downplayed concerns about Meta launching an AI-powered search engine, saying Google’s focus on cost per query sets it up well for serving users across products and the cloud. The company is investing in artificial intelligence to drive extraordinary use cases as costs decrease.
Despite missing earnings estimates, Alphabet’s 2025 capital spending forecast of $75 billion is significantly higher than Wall Street estimates. The stock has dropped since its Q4 results, with one analyst commenting that Meta’s story resonated better.
Source: https://www.investors.com/news/technology/google-stock-googl-google-earnings-q42024